. Daily Forex Analysis - NZD/USD, and AUD/USD React to Economic Data.

Daily Forex Analysis – NZD/USD, and AUD/USD React to Economic Data.

Daily Forex Analysis – NZD/USD, and AUD/USD React to Economic Data.

13 May 2024

Introduction

Amidst cautious sentiment, EUR/USD trades bearishly above 1.0750 ahead of pivotal US economic data. Meanwhile, Pound Sterling maintains strength above 1.2500, buoyed by robust UK GDP figures. NZD/USD falters near 0.6000 post-weaker Kiwi data, while the dovish RBA prompts the Australian Dollar’s depreciation. Investors eagerly await upcoming inflation and employment reports for further market direction.

Markets In Focus Today – EUR/USD

EUR/USD trades with a bearish bias above 1.0750 ahead of US economic data.

The EUR/USD pair trades on a softer note around 1.0770 during the early Asian trading hours on Monday. Investors turn to cautious mode and prefer to wait on the sidelines ahead of the US key economic data this week. The final reading of the US Consumer Price Index (CPI) for April will take center stage on Wednesday, which is expected to show an increase of 3.4% YoY. A jump in consumer inflation expectations has raised the expectation that the Federal Reserve might hold a rate for longer. The inflation outlook registered the highest level since November 2023, with the one-year inflation outlook surging to 3.5% and the five-year outlook rising to 3.1%. Dallas Fed President Lorie Logan said that there are upside risks to inflation, adding it is too soon to be cutting interest rates. On the other hand, the European Central Bank (ECB) policymakers noted last month that they will likely be in a position to cut interest rates in June as inflation in the Eurozone is on track to ease back to 2% next year, according to the account of their April meeting.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.0752 | Positive Crossover | Bullish
  • MA 20 : 1.0742 | Positive Crossover | Bullish
  • MA 50 : 1.0766 | Positive Crossover | Bullish

Simple :

  • MA 10 : 1.0747 | Positive Crossover | Bullish
  • MA 20 : 1.0712 | Positive Crossover | Bullish
  • MA 50 : 1.0786 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 55.4420 | Buy Zone | Neutral

Stochastic   Oscillator : 68.25 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.0826 R2 : 1.0893
  • S1 : 1.0609 S2 : 1.0542

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Stop Buy : 1.0795 | Take Profit : 1.0862 | Stop Loss : 1.0750

GBP/USD

Pound Sterling holds onto gains with eyes on UK employment, US inflation data.

The Pound Sterling holds gains above 1.2500 inspired by strong UK Q1 GDP data.The UK economy expanded by 0.6%, moving out of the recession seen in the second half of 2023.Investors await UK employment and US inflation data for fresh guidance.The Pound Sterling (GBP) exhibits strength above the psychological support of 1.2500 against the US Dollar (USD) in Monday’s London session. The GBP/USD pair holds firmly as the US Dollar struggles to recover higher-than-expected Initial Jobless Claims for the week ending May 3, which raised concerns over the health of the United States labor market. The confidence of financial markets for the US Federal Reserve (Fed) to start lowering interest rates from the September meeting has increased as US labor market conditions have cooled down. For now, investors shift their focus to the US Consumer Price Index (CPI) data for April, which will be published on Wednesday.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 1.2518 | Positive Crossover | Bullish
  • MA 20 : 1.2520 | Positive Crossover | Bullish
  • MA 50 : 1.2560 | Negative Crossover | Bearish

Simple :

  • MA 10 : 1.2523 | Positive Crossover | Bullish
  • MA 20 : 1.2487 | Positive Crossover | Bullish
  • MA 50 : 1.2595 | Negative Crossover | Bearish

RSI (Relative Strength Index) : 50.2728 | Buy Zone | Bullish

Stochastic   Oscillator : 70.59 | Buy Zone | Positive

Resistance   And Support Levels :

  • R1 : 1.2657 R2 : 1.2754
  • S1 : 1.2345 S2 : 1.2248

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Stop Buy : 1.2540 | Take Profit : 1.2617 | Stop Loss : 1.2494

NZD/USD

NZD/USD drops to near 0.6000 after the release of the softer Kiwi data.

NZD/USD has depreciated as the softer Inflation Expectations (Q2) fueled speculation that the RBNZ may lower rates in 2024.The Kiwi Business NZ PSI fell to 47.1 in April, its lowest level since January 2022.Minneapolis Fed President Neel Kashkari refrained from completely dismissing another rate hike.NZD/USD continues to lose ground for the second session, trading around 0.6000 during the Asian session on Monday. The New Zealand Dollar (NZD) depreciated following the release of the 2-year RBNZ Inflation Expectations (QoQ) for the second quarter, which fell to 2.33% from the previous quarter’s 2.50%. This decline has fueled speculation that the Reserve Bank of New Zealand (RBNZ) might consider lowering rates later in 2024. Moreover, the Kiwi Dollar faced pressure as Monday’s Business NZ PSI, a key indicator measuring business activity in New Zealand’s services sector, dropped to 47.1 in April, its lowest level since January 2022. Although, on Friday, the Business NZ Performance of Manufacturing Index (PMI) rose to 48.9 in April from March’s 46.8, it remained below February’s reading of 49.1.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.5995 | Positive Crossover | Bullish
  • MA 20 : 0.5982 | Positive Crossover | Bullish
  • MA 50 : 0.6005 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.5986 | Positive Crossover | Bullish
  • MA 20 : 0.5954 | Positive Crossover | Bullish
  • MA 50 : 0.6008 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 55.0169 | Buy Zone | Bullish

Stochastic   Oscillator : 26.45 | Buy Zone | Negative

Resistance   And Support Levels :

  • R1 : 0.6030 R2 : 0.6084
  • S1 : 0.5854 S2 : 0.5799

Overall Sentiment : Neutral Market Direction : Buy

Trade Suggestion : Limit Buy : 0.5986 | Take Profit : 0.6073 | Stop Loss : 0.5932

AUD/USD

Australian Dollar depreciates due to the dovish RBA, US Dollar remains steady.

The Australian Dollar has depreciated due to the dovish sentiment surrounding the RBA.Australia’s Treasury announced that inflation could re-enter the RBA target range by the end of 2024.The US Dollar received support from the cautious comments from Fed officials regarding interest rate cuts.The Australian Dollar (AUD) extended its losses on Monday, possibly due to the Reserve Bank of Australia (RBA)’s less hawkish stance after it decided to keep its interest rate unchanged at 4.35% on Tuesday. Markets were speculating that the RBA might adopt a more hawkish stance, fueled by last week’s inflation data, which exceeded expectations. Australia’s Treasury announced on Sunday that they forecasted that inflation could re-enter the Reserve Bank of Australia’s (RBA) target range by the end of 2024. In their December outlook, officials predicted that CPI inflation would decrease to 3.75% by mid-2024 and 2.75% by mid-2025, aligning it with the RBA’s target range.

Technical   Overview With Chart :

Moving Averages :

Exponential :

  • MA 10 : 0.6583 | Positive Crossover | Bullish
  • MA 20 : 0.6558 | Positive Crossover | Bullish
  • MA 50 : 0.6545 | Positive Crossover | Bullish

Simple :

  • MA 10 : 0.6580 | Positive Crossover | Bullish
  • MA 20 : 0.6526 | Positive Crossover | Bullish
  • MA 50 : 0.6542 | Positive Crossover | Bullish

RSI (Relative Strength Index) : 57.7618 | Buy Zone | Bullish

Stochastic   Oscillator : 41.72 | Neutral Zone | Neutral

Resistance   And Support Levels :

  • R1 : 0.6602 R2 : 0.6668
  • S1 : 0.6386 S2 : 0.6320

Overall Sentiment : Bullish Market Direction : Buy

Trade Suggestion : Limit Buy : 0.6583 | Take Profit : 0.6665 | Stop Loss : 0.6534

Elsewhere In The Forex Market

USD/CAD down 0.01% to 1.3672, The USD/JPY up 0.6% to 155.85. The EUR/GBP up 0.17% at 0.8605. USD/CHF up 0.6% at 0.9064. AUD/NZD up 0.19% at 1.0991, The USD/CNY up 0.11% at 7.2338, AUD/SEK up 0.16% at 7.1720, at the time of writing.

Key Economic Events & Data Release Today:

(NZD) Inflation Expectations (QoQ) Previous 2.5% at 08:30. (CAD) Building Permits (MoM) (Mar) Forecast –4.6%, Previous 9.3% at 18:00. (USD) FOMC Member Mester Speaks at 18:30.